North America Media Sales Rose 14% at Amazon

Apr 25, 2013

Amazon’s sales rose 22% in the first quarter, to $16.07 billion, but net income fell 37%, to $87 million. Earnings were better than expected and sales were close to expectations. As Amazon expands, books and even Kindles are becoming a smaller part of its overall business. In its press release, Amazon chairman Jeff Bezos talked about Amazon Studios’ new television shows and five “highlights” were devoted to Amazon Web Services (AWS). Total media (which includes print books and e-books) sales rose 7% in the quarter, to $2.5 billion, while electronics and other general merchandise sales (which includes Kindle) increased 28%, to $6.1 billion. The fastest-growing segment was “other” which includes AWS and where sales jumped 59%, to $798 million.

Media sales did do better in North America, up 14%, which the company attributed in part to a stronger "Kindle ecosystem" than in in international markets. A major difference between North America and international markets is the sale of digital items, Amazon said, adding that while digital is growing rapidly in both areas it is a much larger business in North America. In the quarter, the top 10 selling Amazon products were either digital or Kindle related with the Paperwhite reading device its top-selling product worldwide. The increase in digital sales helped to push unit growth faster than dollars with units up 30%.

Even as digital grows, the company is continuing to invest in fulfillment centers with three already planned for the U.S. and "a few" set for other areas. Amazon said it is still early in the year and that more fulfillment centers are likely to be opened. The company also continues to invest in new "geographies" with China, Italy, and Spain cited as important new markets.

For the second quarter, Amazon is projecting sales to rise 13% to 26% over last year’s second quarter with the company expecting an operating loss of as much as $340 million to a profit of $10 million. In last year’s second quarter, Amazon had operating profits of $107 million.

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